By Marguerite Arnold
Minnesota is one of the most tightly regulated marijuana states in the United States at the moment. Only two licenses were approved for the entire state last year to serve the country’s first legislatively defined “smokeless state.”
The decision to select only two companies to serve such a large and far-flung state was highly controversial last year. This June, a key state health department official, Manny Munson-Regala, the former assistant commissioner at the Minnesota Department of Health, stepped down from his state post and was later named CEO of LeafLine Labs.
The predictable storm this move has generated so far has not been stemmed by the fact that as the Twin Cities Business Journal reported, LeafLine did not approach Munsen-Regala until June 3, 2015. The state program has been run on a daily basis since last July by Michelle Larson. Munsen-Regala has replaced interim LeafLine Labs CEO Pam Galassini.
That said, so far, both Munsen-Regala and LeafLine Labs are clear that their association has been close since at least the passage of the state legalization program. In his position as state assistant commissioner, Munsen-Regala oversaw Minnesota’s entire health bureau covering several state offices including that of medical cannabis.
Leafline co-founder and chief medical officer Dr. Andrew Bachman told the Business Journal that Munsen-Regala was strategizing with his company from the time immediately following state legalization. LeafLine then became one of two companies to get the state marijuana license. Munsen-Regala has held leadership roles in both the private and public sector in the past including legal and legislative strategy roles at UnitedHealthcare and State Farm Fire and Casualty.
No matter how many feathers this development may ruffle temporarily, this kind of professional move is hardly the first, nor likely to be the last. All over the country, state officials are switching sides to join marijuana businesses they once even directly opposed.
Perhaps the most high profile former public official to join the green rush to date is former two-term New Mexico Gov. Gary Johnson who became the CEO of Cannabis Sativa Inc. last year. In Nevada last year, many noted the gumption of Sig Roglich, former Reagan-era official and paid campaigner for continued prohibition as late as the early 2000s, for throwing his hat into the ring for one of the first licenses in Clark County.
As states across America continue to battle through legalization and regulations for the nascent business community, these close associations and industry-government seat swaps are likely to occur for some time. Furthermore, to protect the interests of the industry, these former regulators and officials are often called upon, as it appears LeafLine Labs has done with Munsen-Regala, for their expertise in state government.
In an industry as young and convoluted as it is, particularly before some kind of federal reclassification of marijuana, the revolving green door between those who set the rules and those who hope to start monetizing them will continue apace.